Soil Health and Economic Risk

Soil health promoting practices like reduced tillage, cover crops, and crop rotation can alter both crop yield and input requirements. Because yield and input costs dramatically impact revenue, it is important to know how soil health practices can impact a producer’s bottom line. Recognizing that little on-farm data is readily available for such evaluations, scientists from the Soil Health Institute and Purdue University sought to address this need using both published data from 22 sources and modeled data from 85 sources. Contribution Margin (defined as sales revenue minus variable costs) was calculated and used to assess economic risk associated with a soil health promoting practice compared to a conventional practice. Overall, the results indicated no statistically significant difference. However, the authors noted that additional information is needed such as data on fuel, chemical application, and machinery costs that would differ greatly among practices and would likely influence the result. That data was not available for this first assessment. Additional evaluations to quantify the economics of soil health management systems are currently being conducted.